Philip Morris International (PMI) has increased its offer for Swedish Match, pushing up the price the company is willing to pay by nearly 10 per cent to expand into the cigarette alternatives sector, reports Financial Times.

The increase in the offer comes after hedge funds built a stake in Swedish Match. US group Elliott Management has built a 7.25 per cent stake in the Swedish company, according to data compiled by Bloomberg. PMI offered SEK 106 (USD 9.50) per share for Swedish Match in May, but raised that offer to SEK 116 (USD 10.39) per share on 20 October, valuing the target’s equity at about SEK 176 billion (USD 15.75 billion). PMI said it would not increase the offer further. It added that the new offer represented a 52.5 per cent premium to the group’s share price before the original offer was made in May.
According to the report, PMI CEO Jacek Olczak said that the new price “primarily reflects the higher net value to PMI (…) given currency movements since the initial offer was announced in May.” “We believe that the deterioration in the global economic outlook, equity markets and the interest rate environment since the time of the initial offer strengthens yet further the attractiveness of the revised offer,” he added.